One of the most important things many business owners fail to prepare for is their eventual exit from the business. Whether due to retirement, transfer of ownership, or an unexpected life event, good succession planning is crucial for ensuring that your business continues to stand and thrive after you leave.
For this week’s blog, I want to offer you some of the invaluable information my recent guest Bradley Franc shared on the Elite Entrepreneurs podcast. Bradley is an expert in helping business owners put the systems and people in place to prepare for their eventual exit.
Here’s an alarming statistic for you: 70% of businesses don’t successfully survive the exit of the owner. However, the bright side is that 85% of those failures are due to factors that are in the owner’s control. That means that with the right preparation and good succession planning, your business’s chances of success are high.
The important thing is to get started early. The longer you wait, the fewer options you have. And it isn’t just about planning for your retirement. An unexpected illness or other life events could force you to leave your business earlier than you plan. That’s why it’s critical that you have a plan in place now, and that you revisit it every 90 days to ensure that your plan is consistent with the evolving needs of your business.
The Factors of Good Succession Planning
Good succession planning isn’t just about finances; it should take into account all the various aspects of your organization. As Bradley said during our interview, it’s a team effort and something that requires transparency, intentionality and forethought.
How do you get started planning for your exit? Bradley recommends you speak to your existing financial and legal advisors and ask if they have prior experience with succession planning. If not, there are many experts you can turn to for assistance. It’s important to work with someone with experience who knows the right questions to ask and factors to consider that you may not think of yourself.
Getting good succession planning in place allows you the peace of mind to know that your business is prepared for whatever may come. Once you have the people and systems in place, the eventual transition can be smooth and straightforward.
Why Should You Check In Quarterly?
As you know, I’m a firm believer in keeping a regular cadence of strategic planning for any business. It’s one of the core principles of the Elite Business Growth Method, after all. Just as it is important to periodically review your progress and update your strategy to grow your business, it’s just as important to do the same with your succession planning. Your business grows and changes over time, and your succession planning needs to be periodically updated to reflect these changes.
Some business owners avoid doing the necessary work because they may feel like they’re giving up control of the business they grew and nurtured, but the opposite is true. Getting your succession planning in place is an important responsibility, and taking care of it now gives you greater control and peace of mind.
Remember, having a plan in place is just a part of laying a strong foundation for your business and its continued healthy operation. Now is the perfect time to get good succession planning in place, especially if you aren’t planning on leaving the organization any time soon.